For stage 1, which
begins in 2011, CMS proposes 25 objectives for physicians to meet to be
deemed meaningful EMR usage. Stages 2 and 3 will expand the list in 2013 and
2015, and the added requirements will be proposed through future rulemaking.
Physicians failing to adopt an EMR and meet the objectives by 2015 will face
Medicare penalties. Doctors who wait until 2013 or 2014 to have EHRs in place will be eligible for smaller bonuses. The
2013 adopters can capture a maximum of $39,000 over four years, while the
2014 adopters can claim up to $24,000 over three years. Medicaid will have
its own five-year bonus schedule that will offer as much as $64,000 to
eligible physicians who don't claim Medicare bonus money.

Physicians with approved EHRs
in place before 2011 or 2012 will be eligible for the maximum Medicare incentive
payments allowed by the stimulus. They will receive bonuses equal to 75% of
their allowed Medicare Part B charges -- up to a sliding cap -- in each of
the five years after adoption. The maximum of $18,000 in the first year
phases down to $2,000 in the fifth year for a total five-year bonus of up to
$44,000 for early adopters.

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Physicians with approved EHRs
in place before 2011 or 2012 will be eligible for the maximum Medicare
incentive payments allowed by the stimulus. They will receive bonuses equal
to 75% of their allowed Medicare Part B charges -- up to a sliding cap -- in
each of the five years after adoption. The maximum of $18,000 in the first
year phases down to $2,000 in the fifth year for a total five-year bonus of
up to $44,000 for early adopters.

As much as $27 billion may be expended in
incentive payments, according to CMS. Eligible physicians who meet all
required objectives could receive as much as $44,000 over five years from
Medicare, or $63,750 over six years from Medicaid. Hospitals may receive
millions of dollars for meaningful use under both Medicare and Medicaid.

The Medicare and Medicaid EHR Incentive Programs are new and separate
programs from other active CMS incentive programs, such as the Physicians
Quality Reporting Initiative (PQRI) and the MIPPA E-Prescribing Incentive
Program.

Physicians with approved EHRs
in place before 2011 or 2012 will be eligible for the maximum Medicare
incentive payments allowed by the stimulus. They will receive bonuses equal
to 75% of their allowed Medicare Part B charges -- up to a sliding cap -- in
each of the five years after adoption. The maximum of $18,000 in the first
year phases down to $2,000 in the fifth year for a total five-year bonus of
up to $44,000 for early adopters.

As much as $27 billion may be expended in
incentive payments, according to CMS. Eligible physicians who meet all
required objectives could receive as much as $44,000 over five years from
Medicare, or $63,750 over six years from Medicaid. Hospitals may receive
millions of dollars for meaningful use under both Medicare and Medicaid.

The Medicare and Medicaid EHR Incentive Programs are new and separate
programs from other active CMS incentive programs, such as the Physicians
Quality Reporting Initiative (PQRI) and the MIPPA E-Prescribing Incentive
Program.

Doctors who wait until 2013 or 2014 to have EHRs in place will be eligible for smaller bonuses. The 2013 adopters
can capture a maximum of $39,000 over four years, while the 2014 adopters can
claim up to $24,000 over three years. Medicaid will have its own five-year
bonus schedulethat will offer as much as $64,000 to eligible
physicians who don't claim Medicare bonus money.

Each stage 1 objective has a corresponding measure
attached to it. For example, an objective for physicians to generate and
transmit prescriptions electronically requires doctors to submit at least 75%
of all prescriptions electronically using certified EMR technology.

For the first round of Medicare and Medicaid EMR
bonuses in 2011-12, physicians must meet 15 core objectives and at least five
of 10 "menu set" items. Each objective has a measure to determine
if an EMR was used to perform the function for an appropriate number of
opportunities:

Physicians now can defer up to five EMR
objectives in the first two years and still qualify for Medicare or Medicaid
financial incentives.

Use computerized physician
order entry (CPOE) for medication orders directly entered by any licensed
healthcare professional who can enter orders into the medical record per
state, local and professional guidelines.

More than 30% of unique
patients with at least one medication in their medication list seen by the EP
have at least one medication order entered using CPOE.

Any
EP who writes fewer than 100 prescriptions during the EHR reporting period.

2

Implement drug-drug and drug-allergy
interaction checks.

The EP has enabled this
functionality for the entire EHR reporting period.

None

3

Generate and transmit
permissible prescriptions electronically (eRx).

More than 40% of all permissible
prescriptions

written by the EP are transmitted electronically using
certified EHR technology.

Any
EP who writes fewer than 100 prescriptions during the EHR reporting period.

Performed at least one test of certified
EHR technology's capacity to electronically exchange key clinical
information.

None

15

Protect electronic health
information created or maintained by the certified HER technology through the
implementation of appropriate technical capabilities.

Conduct or review a security
risk analysis per 45 CFR 164.308 (a)(1) of the Final Rule and implement
security updates as necessary and correct identified security deficiencies as
part of its risk management process.

More than 40% of all clinical
lab-test results ordered by the EP during the EHR reporting period whose
results are either in a positive/negative or numerical format are
incorporated in certified EHR technology as structured data.

Any
EP who orders no lab tests whose results are either in positive/negative or
numeric format during the EHR reporting period.

3

Generate lists of patients by specific
conditions to use for quality improvement, reduction of disparities, research
or outreach.

Generate at least one report
listing patients of the EP with a specific condition.

None.

4

Send reminders to patients per patient
preference for preventive/follow-up care.

More than 20% of all unique
patients 65 years old or older or 5 years old or younger were sent an
appropriate reminder during the EHR reporting period.

Any
EP who has no patients 65 years old or older or 5 years old or younger with
records maintained using certified EHR technology.

5

Provide patients with timely
electronic access to their health information (including lab results, problem
list, medication lists, medication allergies) within
four business days of the information being available to the EP.

More than 10% of all unique
patients seen by the EP are provided timely (available to the patient within
four business days of being updated in the certified EHR technology)
electronic access to their health information subject to the EP's discretion
to withhold certain information.

Any
EP that neither orders nor creates any of the information listed at 45 CFR 170.304(g)
in the July 13, 2010 Final Rule during the EHR reporting period.

6

Use certified EHR technology to
identify patient-specific education resources and provide those resources to
the patient if appropriate.

More than 10% of all unique
patients seen by the EP are provided patient-specific education resources.

None.

7

The EP who receives a patient
from another setting of care or provider of care or believes an encounter is relevant
should perform medication reconciliation.

The EP performs medication
reconciliation for more than 50% of transitions of care in which the patient
is transitioned into the care of the EP.

Any
EP who was not the recipient of any transitions of care during the EHR
reporting period.

8

The EP who transitions their
patient to another setting of care or provider of care or refers their
patient to another provider of care should provide summary of care record for
each transition of care or referral.

The EP who transitions or
refers their patient to another setting of care or provider of care provides
a summary of care record for more than 50% of transitions of care and
referrals.

Any
EP who neither transfers a patient to another setting nor refers a patient to
another provider during the EHR reporting period.

9

Capability to submit electronic
data to immunization registries or Immunization Information Systems and actual
submission in accordance with applicable law and practice.

Performed at least one test of
certified HER technology capacity to submit electronic data to immunization
registries and follow-up submission if the test is successful (unless none of
the immunization registries to which the EP submits such information have the
capacity to receive the information electronically).

Any
EP who administers no immunizations during the EHR reporting period or where
no immunization registry has the capacity to receive the information
electronically.

10

Capability to submit electronic
sydromic surveillance data to public health
agencies and actual submission in accordance with applicable law and
practice.

Performed at least one test of certified
EHR technology capacity to submit electronic syndromic
surveillance data to public health agencies and follow-up submission if the
test is successful (unless none of the public health agencies to which an EP
submits information have the capacity to receive the information
electronically).

Any
EP who does not collect any reportable syndromic
information on their patients during the EHR reporting period or does not
submit such information to any public health agency that has the capacity to
receive the information electronically.

Eligibility
Requirements for Professionals

Incentive payments for eligible professionals
are based on individual practitioners.

If you are part of a practice, each
eligible professional may qualify for an incentive payment if each
eligible professional successfully demonstrates meaningful use of
certified EHR technology.

Each eligible professional is only
eligible for one incentive payment per year, regardless of how many
practices or locations at which he or she provide services.

Hospital-based
eligible professionals are not eligible for incentive payments. An eligible professional is
considered hospital-based if 90% or more of his or her services are
performed in a hospital inpatient (Place Of
Service code 21) or emergency room (Place Of Service code 23) setting.

Simply setting up any
paperless system is not enough to earn bonuses and avoid penalties. The
stimulus package stipulates that physicians must adopt a qualifying EHR and use
it in a "meaningful way." Meaningful users are defined as
physicians who demonstrate to the Health and Human Services Dept. that they
are using electronic prescribing; that their technology is connected in a
manner that provides for electronic exchange of health data to improve
quality of care; and that they submit information to HHS on clinical quality
measures.

Once the chance for
bonuses ends, Medicare starts penalizing physicians who have not responded to
the incentives. Doctors who have not adopted an EHR before 2015 and who fail
to obtain a hardship exemption will see a 1% cut to their Medicare pay, a
reduction that phases up to 3% for 2017 and remains each year after that.

In an effort
to prevent additional "double-dipping," physicians who report using
an EHR system that is also capable of e-prescribing no longer will be
eligible for the e-prescribing bonuses that went into effect this year under
the Medicare Improvements for Patients and Providers Act. On the other hand,
Medicare penalties for those not e-prescribing by 2012 will sunset after
2014, so that no physician will be subject to double penalties for failing to
e-prescribe and failing to use an EHR.

Once the chance for bonuses
ends, Medicare starts penalizing physicians who have not responded to the
incentives. Doctors who have not adopted an EHR before 2015 and who fail to
obtain a hardship exemption will see a 1% cut to their Medicare pay, a
reduction that phases up to 3% for 2017 and remains each year after that.